UBS Belgium Chief Quizzed in Multibillion-Euro Tax Probe

By Gaspard Sebag and Aoife White -
Jun 19, 2014

Marcel Bruehwiler, chief executive
of UBS AG’s (UBSN) Belgium unit, was charged in Brussels as part of a
probe into a multibillion-euro tax fraud, accelerating the
latest tax-evasion inquiry facing the Swiss bank.

Prosecutors said the investigation deals with activities
begun a decade ago in which UBS (UBS) employees allegedly targeted
wealthy Belgian clients. The bankers encouraged them to open
undeclared accounts in Switzerland, according to a report last
month in the magazine M... Belgique, which didn’t say where it
got the information. UBS Belgium helped organize the transfer of
large amounts of client money to Switzerland, the magazine said.

Bruehwiler was charged with criminal organization, money
laundering, illegal practice of the profession of financial
intermediary and serious organized fiscal fraud, prosecutors in
Brussels said today.

UBS avoided U.S. prosecution in 2009 by admitting it aided
tax evasion, paying $780 million and handing over data on 250
accounts. It later disclosed information on about 4,450 more.
Paris prosecutors are also investigating allegations UBS’s
French unit helped clients hide their wealth in Swiss accounts.

Bruehwiler, who was released after several hours of
questioning, denied the charges, prosecutors said. Police today
searched his home and that of a client, as well as the bank’s
offices, officials said.

‘Fiscal Fraud’

Information pointing to “serious organized fiscal fraud”
was “obtained via very specific accusations of compliance
officers who have either left the bank, or been laid off and
could no longer stand the modus operandi of UBS,” prosecutors
said earlier. The tax evasion is “estimated at several billion
euros.”

“We conduct our business in full compliance with
applicable law and regulations,” UBS spokesman Yves Kaufmann
said in a phone interview earlier today. “UBS does not tolerate
any activities intended to help its clients circumvent their tax
obligations. We fully collaborate with the Belgian
authorities.”

UBS Belgium’s office in Brussels couldn’t provide contact
details for Bruehwiler’s representatives or lawyer. Karina
Byrne, a spokeswoman for UBS in New York, declined to comment on
the charges.

In the French probe, banking regulators fined Zurich-based
UBS 10 million euros ($13.6 million) last year for deficient
controls against tax fraud and illegal sales practices. Tax
investigators searched its offices in Paris, Lyon and Strasbourg
in 2012.

Switzerland’s Credit Suisse Group AG (CSGN) paid $2.6 billion in
fines after its bank unit pleaded guilty to helping Americans
cheat on their taxes. U.S. authorities are seeking more than $10
billion from France’s BNP Paribas SA (BNP) for alleged breaches of
sanctions on countries including Iran and Sudan, a person
familiar with the matter has said.